NASCLA Business Law Questions and Answers, Exams of Law

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NASCLA BUSINESS LAW questions with correct

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sole proprietor CORRECT ANSWER A form of business ownership is least regulated partnership CORRECT ANSWER Under which form of business organization are all investors fully liable for all debts of the business. S corporation CORRECT ANSWER owner who is looking for maximum protection from personal liability leaving something out CORRECT ANSWER worst possible error in estimating source documents CORRECT ANSWER the paperwork related to purchase order, credit card receipts and so on... Income Statement CORRECT ANSWER A financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time. Balance Sheet CORRECT ANSWER a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period. Cash Flow Statement CORRECT ANSWER A summary that shows total income and spending for a given time period

Depreciation CORRECT ANSWER term use for the method of allocating the cost of an asset over its useful life 168 hours (7 x 24 hours) CORRECT ANSWER number of hours in a define Fair Labor Standard Acts workweek State Income Tax CORRECT ANSWER taxes deducted solely from employee's wages Form W-3, Transmittal of Wage and Tax Statements CORRECT ANSWER A form completed by the employer to verify the number of W-2s and amounts withheld as shown on them. This form is sent to the Social Security Administration data processing center along with copies of each employee's W-2 forms. FUTA (Federal Unemployment Tax Act) CORRECT ANSWER A payroll or employment tax paid solely by the employer based on the salary, usually around .6% to cover the unemployment insurance (UI) and job service programs, pay one-half of the cost of extended unemployment benefits, and provides for a fund from which states may borrow 4 years CORRECT ANSWER how long must federal employment tax records must be kept? establish a basis for future estimates CORRECT ANSWER one useful outcome of job cost analysis is to bonds CORRECT ANSWER which of the following is NOT a company overhead cost? Project overhead costs CORRECT ANSWER Can be charged to a specific project

Cannot be attributed to labor, materials, or equipment 4-10% the cost of construction EX bonds, equipment storage, project office, security, permits, construction loan CORRECT ANSWER which of the following is a project overhead cost? allowances CORRECT ANSWER the amount of money you plan to use for a certain budget category that are not estimated. Unit Price Contract CORRECT ANSWER A contract in which payment is based on a contractor's quoted price per unit of work performed and the owner's measurement of the total number of such units installed. This method is often used when materials and labor are hard to determine. the supplier must be competitive CORRECT ANSWER all local contractors should expect their material costs are similar because basis for the bid CORRECT ANSWER what information do project documents ALWAYS provide? contract CORRECT ANSWER a binding agreement between two or more persons that is enforceable by law read and understand the contract CORRECT ANSWER what action is essential before signing a contract? written agreement prevail over oral agreement CORRECT ANSWER which of the following is an established legal guideline for contract?

the standard form of agreement CORRECT ANSWER which contract document must be sign by both owner and contractor? turnkey contract CORRECT ANSWER a contract gives the prime contractor responsibility for developing the entire project and these contracts often increase the income and profit potential to the contractor. lump sum contract CORRECT ANSWER A contract with a fixed total price for a well-defined product or service; also called a fixed-price contract Unit Price Contract CORRECT ANSWER An agreement that divides a contract into various quantities of work categories for the contractor to perform design and build contract CORRECT ANSWER similar to the turnkey except the owner may control the land, budget and schedule turnkey contract CORRECT ANSWER a method of organizing a building project in which a contractor and a designer agree to provide a finished building at an agreed-upon price. Upon completion of the project, all the owner has to do is "turn the key" in the door. Most turnkey projects are built for the Department of Housing and Urban Development (HUD). Contractor responsibility CORRECT ANSWER responsible for complying with all the state and federal regulations relating to a contracted project. fast track CORRECT ANSWER Describing a construction procedure in which construction on each phase of a project is begun when its design is completed, without waiting for overall project design completion.

the work continues CORRECT ANSWER the owner disputes a claim filed by the contractor for additional money and the claim is not safety related. What is the proper course of action by the contractor? it is interpreted against the party who wrote it CORRECT ANSWER the general rule for interpreting an ambiguous provision in a contract is? lump sum contract CORRECT ANSWER A contract with a fixed total price for a well-defined product or service; also called a fixed-price contract Retainage CORRECT ANSWER A certain percentage of money owed to the contractor for work progress that is held back by the owner to encourage completion of the project. superintendent CORRECT ANSWER a person who directs and manages daily activities on site. Project Scheduling CORRECT ANSWER Identifying precedence relationships Sequencing activities Determining activity times & costs Estimating material & worker requirements Determining critical activities process of identifying each task and determine how long each task will take CORRECT ANSWER when planning and scheduling, the project manager develop a critical task analysis, which is the

superintendent responsibilities CORRECT ANSWER coordinating with code officials and inspectors, direct workers and subcontractors, scheduling material deliveries, preparing daily logs Project Manager Responsibilities CORRECT ANSWER the work, human resources, communication quality, time, costs & scope Contractor Responsibilities CORRECT ANSWER selecting suppliers and subs Daily Report CORRECT ANSWER all invoices, receipts, time cards and other source documents are entered into the daily journal. material or equipment supplier CORRECT ANSWER shop drawings that clarify the architect's drawings and specifications are often provided by job cost system CORRECT ANSWER costs are accumulated by individual jobs when material is issued and labor costs incurred (estimated vs actual cost). Builder Risk Insurance CORRECT ANSWER protect the contractor against any loss or damage to the project structure and materials or equipment purchased for the project while it is under construction. payment and performance bond (Miller Act) CORRECT ANSWER two types of bond are required on all federal project Performance Bond CORRECT ANSWER A contract bond guaranteeing that a contractor's work will be completed according to plans and specifications.

Bid bonds/surety bonds CORRECT ANSWER to ensure that the successful bidder will accept the contract once awarded property (NOT owner, prime contractor or subcontractor) CORRECT ANSWER A subcontractor has refused to pay employees for their work on a project. The employee's lien for unpaid wages may be filed against the The ADA applies to all employers/businesses with 15 or more employees CORRECT ANSWER The rules and regulations of the ADA apply to all employers with a minimum of how many employees? 18 (depart of labor prohibit all hazardous work for minors) CORRECT ANSWER A roofing contractor wants to hire some summer help. Summer help should be at least 3 years CORRECT ANSWER lead pre-notification pamphlet confirmation of the receipt of delivery must be kept OSHA Form 301 (Injury and Illness Incident Report) 6 or 7 working days CORRECT ANSWER Form that requires much more detail about each injury or illness. Form 301 must be completed within _____ working days from the time the employer learns of an occupational injury or illness. profit CORRECT ANSWER total revenue minus total cost Invitation to Bid CORRECT ANSWER A documents described the proposed project.

$7,000 CORRECT ANSWER If an employer receives a citation, but fails to correct the violation, the employer must be fined up to ___ for each day the violation continues $5,000 CORRECT ANSWER Minimum per penalty for each violation for a willful OSHA violation direct costs of a cost object CORRECT ANSWER Costs related to the particular cost object (labor, materials and subcontractors) Individual Retirement Account CORRECT ANSWER An account such as an IRA or 401(k) that helps an individual set aside money for retirement. EXEMPT from STATE'S WITHHOLDING. Balance Sheet CORRECT ANSWER A financial statement that reports assets, liabilities, and owner's equity on a specific date. general and project overhead CORRECT ANSWER overheads are not used to calculate GROSS PROFIT of a job. FICA (6.2%) + Medicare (1.45%) = 7.65% CORRECT ANSWER what percentage of each employee's earning must the employer contribute to SSA and Medicare taxes? Workers' Compensation Insurance (3 or more employees) CORRECT ANSWER type of insurance is required by law for large contracting company Fidelity Bond CORRECT ANSWER Insurance coverage to protect a business from losses due to employee theft

laborers, suppliers, subcontractors, prime contractors CORRECT ANSWER when property is sold to satisfy debs, payment are made in the following sequence: I-9 Form CORRECT ANSWER Employment eligibility verification form, used for verifying the identity and employment authorization of individuals hired for employment in the United States. MUST BE FILED WITHIN 3 BUSINESS DAYS! FLSA (Fair Labor Standards Act) CORRECT ANSWER Federal law that establishes a minimum wage and requirements for overtime pay and child labor fine up to $10k and/or up to 6 months imprisonment CORRECT ANSWER if the supervisor knowingly changes statements in the injury log, Acid test ratio (quick ratio) CORRECT ANSWER (Current Assets - Inventory) / Current Liabilities Current Ratio Formula CORRECT ANSWER Current Assets / Current Liabilities Return on Assets CORRECT ANSWER Net Income/Total Assets Return on Total Assets (ROA) CORRECT ANSWER which ratio is used to indicate how well the company's asset are being used? margin of profit CORRECT ANSWER Net income / Revenue (Sales)

Accrual Accounting CORRECT ANSWER accounting method that records revenues and expenses when they occur, not necessarily when cash actually changes hands Cash accounting method CORRECT ANSWER Accounting method where income and expenses are recorded at the time the money changes hands. DOES NOT RECORD BAD DEBTS! Comprehensive General Liability CORRECT ANSWER broad coverage for personal injuries or property damage. Indirect costs (overheads) CORRECT ANSWER costs that are the result of a firm's general operations and are not directly tied to any specific cost object Balance Sheet Formula CORRECT ANSWER Assets = Liabilities + Stockholders' Equity 12 inches CORRECT ANSWER Wood plates are being laid out so that the rough openings for the doors can be located. Anchor bolts must be placed so that there is a bolt located within how many inches from the end of each section plate? $0 CORRECT ANSWER A contractor puts in a claim under a comprehensive standard general liability policy. The policy has no additional coverage, riders, or floaters, and has a $1,000 deductible per occurrence. The claim is for a job-site accident that caused $5,000 of injuries to employees, $1,000 of injuries to a pedestrian, $3,000 damage to the contractor's equipment, and $3,000 loss of project materials purchased by the contractor. The insurance company is liable for 50 degrees Fahrenheit CORRECT ANSWER What is the minimum temperature to be maintained during gypsum board finishing procedures?

75% CORRECT ANSWER For a concrete masonry wall to be solid, all units must have at least what percentage of its net area as solid? clips CORRECT ANSWER Metal panels that are designed to act as stressed-skin panels are attached directly to the structural frame of the building with development phase CORRECT ANSWER Which phase of the value engineering process involves creating design concepts for the alternatives identified in the evaluation phase? No load can be supported by an unbraced truss. CORRECT ANSWER Which is a true statement regarding the maximum construction load that can be placed on an unbraced truss? the thinner the lift the better the compaction CORRECT ANSWER Which is true about compacting the sub-base in preparation for concrete placement? prevent condensation from accumulating in the roof CORRECT ANSWER What is the purpose of a vapor retarder in a built-up roof system? date manufactured CORRECT ANSWER According to OSHA, welded alloy steel chain slings shall have permanently affixed durable identification. Which specification is NOT required to be included? 1.5 in CORRECT ANSWER An installed truss with 20 ft span and 6 ft in depth? what is the max amount it can be out of plumb?

1 in CORRECT ANSWER The space between insulation and roof sheathing of a slope ceiling shall be a minimum 50 persons CORRECT ANSWER egress doors must be in the direction of travel when the occupant load is more than 4-5 days CORRECT ANSWER minimum length of required for wood flooring to be stored in the building to allow for climate acclimation. concave CORRECT ANSWER type of joint finish is the most effective at preventing the damage from freezing air gap CORRECT ANSWER when constructing a light weight curtain wall, what shall be between the building insulation and external panel? schedule of values CORRECT ANSWER The ___ enables the architect to certify progress payments with some assurance that the total amount paid corresponds to the completed percentage of the work. 18 inches (OSHA) CORRECT ANSWER guard rails and personal fall arrest systems shall be provided whenever platforms and walk way cannot feasibly be how wide? number 12s or 1/4 in CORRECT ANSWER what screw size is to be used to fasten metal decking? heartwood of bald cypress, redwood and various cedars CORRECT ANSWER type of natural wood has the had highest in decay resistance

only when pressure is reduced to 30 psi and personal protective equipment is provided CORRECT ANSWER when may compressed air be used to clean dust from the equipment? from paying twice for services or materials CORRECT ANSWER what does the lien waiver release the owner from? controlled drying CORRECT ANSWER when concrete is cured properly, which of the following is included? Proctor Test CORRECT ANSWER A laboratory compaction test to determine the optimum moisture content and density for a soil. unload as close as possible to building site CORRECT ANSWER when unloading trusses what should a builder do? the exhaust gases must be vented outside CORRECT ANSWER when an internal combustion engine is used indoors what must be done? They must be arranged in a standard telephone pattern CORRECT ANSWER which of the following is true regarding ELEVATOR FLOOR CONTROL BUTTONS within 8 hours (provide written report within 7 days) CORRECT ANSWER if an incident results in a death of a worker, what is the maximum amount of time it must be report to OSHA? 6 feet CORRECT ANSWER what is the maximum installation interval that foundation plates or sills should be installed?

slot dozing CORRECT ANSWER what is the most efficient method to move material a short distance downgrade? 1 1/2 : 1 CORRECT ANSWER what is the suggested angle of repose for shoring compacted sharp sand? a deck is more than 30 inches above grade CORRECT ANSWER A deck is required to have a guard rail when? defibrillator CORRECT ANSWER what is not required to be provided by employer on a jobsite? 6 inches CORRECT ANSWER minimum thickness of compacted granular material is to be used as the base of a concrete curb? Supplementary Conditions CORRECT ANSWER reporting and documenting of construction activities for archaeological areas of a jobsite. Cover specific details related to items such as project administrative procedures, bonds, contract time, construction phasing, insurance requirements, site operations, payment procedures, change order markups, and close out. raised or flush CORRECT ANSWER elevator call button located in the lobby shall be grey water systems CORRECT ANSWER collect water from showers, bathtubs, dishwashers, and clothes washers and then reuse this water on lawns, to wash cars, or to flush toilets

kitchen sink CORRECT ANSWER Not a source of grey water 18 inches CORRECT ANSWER minimum clearance from the pull side of an accessible manual swing door when approached from the front parallel to the doorway project drawings / photos CORRECT ANSWER requirement in the specifications to record "as built" information that will be given to the owner at the substantial completion the veneer carries its own weight CORRECT ANSWER what is the most accurate regarding a brick veneer wall? wether the erector has the capability of rotating pieces CORRECT ANSWER a significant factor in determining how precast materials should be delivered to a jobsite refer to technical specifications CORRECT ANSWER how would a contractor determine which sealant to use in a particular application? stored in a covered container CORRECT ANSWER what is true regarding oil rags and flammable waste? an employee appraisal system CORRECT ANSWER establishes performance standards used to evaluate employee performance and should include? kitchen sink CORRECT ANSWER Not a source of grey water kitchen sink CORRECT ANSWER Not a source of grey water

kitchen sink CORRECT ANSWER Not a source of grey water